Navigating the lending world can be a confusing place for home buyers. Varying interest rates, closing costs and lending fees are overwhelming to many. Using a broker can greatly reduce the frustration of finding a home loan.
Mortgage Broker vs. Mortgage Lender A broker is an independent business person. They work with several companies to place a loan with the company that is best to service it.
A mortgage lender works for a specific institution, like a bank. They offer clients the loans that their institution has available.
In general, brokers offer clients a broader spectrum of loan options than mortgage lenders. They work for more than one company, and can offer several products. Because they provide this service, brokers typically charge a higher fee for services than mortgage lenders. Many home buyers have no problem paying a higher rate in exchange for the convenience of using the services of a broker.
Brokers are experts in the industry. They have broad knowledge of the types of loans available. They are your ally in navigating the complicated waters of mortgage lending. Due to their expertise, they can typically nudge a loan along. In general, they can close a loan faster than mortgage lender.
Mortgage Brokers Save Home Buyers Time Because brokers work with several lending institutions, using their services can save home buyers time. Brokers know which lending institution the home buyer is best suited to apply to. They know where they can find the best rate and quick approval.
If a home buyer is rejected for a bank home loan, they must start the loan process over with another bank.
Mortgage Brokers are a Home Buyer's Advocate Brokers work as an advocate for the home buyer. They handle communication with lenders and underwriters. If an issue is arguable, mortgage brokers will fight for the side of the home buyer. In addition, they have expertise in dealing with underwriters. Underwriters are the people who decide if a home buyer will be approved for a loan. Brokers understand the language that an underwriter uses, and they know what verbiage to use to get the loan closed.
Credit Score Because they work with several companies, brokers can work with people who have blemishes on their credit score. Also, brokers pull your credit one time. If a home buyer works with a mortgage lender, their credit will be pulled each time they apply for a loan.
Bulk Discounts Brokers who bring a lot of business to a particular institution may be eligible for bulk discounts. This means they may be able negotiate a better rate than what the institution is advertising. They also know who to talk with at each institution to get things moving.
At the end of the day, busy home buyers will save time by hiring a broker. Brokers help home buyers negotiate the lending and underwriting process. They serve as an advocate for home buyers. Because they operate independently, they can shop around for the best product.
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Article Added on Thursday, May 8, 2014
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